More than half a billion dollars in property taxes for school districts will be rerouted this year to flow through the state treasury before reaching schools.

School superintendents are worried the state could hold on to some of the cash in the case of financial troubles, but the bill’s author says that won’t happen. He says the change is meant to clarify that the property taxes are state aid because the state mandates them.

“It was designed for transparency and proper accounting,” said Ty Masterson, chair of the Senate’s budget committee.

Masterson, R-Andover, said the 20 mills in property taxes that, by state law, county treasurers collect for each school district, aren’t always viewed as state aid.

“The state as a whole has ‘X’ amount of property valuation, which we’ve been taxing at 20 mills,” he said, but the state hasn’t been “showing the public where it actually is, who is taxing it — i.e. the state — and where it’s going.”

The 20 mills contribute to school districts’ general funds. Most districts also qualify for general state aid in addition to these property taxes.

Normally county treasurers collect the 20 mills and send the money directly to school districts. Now counties will send the money — an estimated $570 million this year — to the state treasury, which will disburse it to the districts. As a result, the Kansas State Department of Education expects to report it as state aid instead of local funding.

Some school administrators say they are nervous about the change.

Silver Lake superintendent Tim Hallacy said it has him wondering if the state could retain some of the money if it experiences budget problems.

“Will they at some point start to tap those 20 mills to make ends meet?” Hallacy asked.

During the financial crisis, Gov. Mark Parkinson reduced state payments to schools as state tax revenues plummeted.

Jeff Zehnder, spokesman for the Seaman school district, noted the state has also been late with its payments in the past, and now the state will control more payments.

“This gives another opportunity for that to happen,” Zehnder said.

But Masterson says he is “absolutely confident” districts will receive their payments in full.

“Nothing changes as far as the use of the money or the dedication of the money,” he said. “The law makes no change on that.”

If a governor were to cut school budgets again midyear, Masterson said, those cuts would come out of general state aid, not the school districts’ property taxes.

“That base 20 doesn’t change at all,” he said.

Under the new law, when the state treasury receives the property tax money, it will deposit it into a school finance fund until it can be disbursed. The Kansas State Department of Education says disbursal should happen within a week or 10 days of the state receiving it.

State treasurer Ron Estes says the treasury wouldn’t be able to divert the money for other purposes, because that would require the Legislature to change the school finance formula or base state aid.

But Sen. Laura Kelly, the ranking Democrat on the Senate budget committee, says the matter may not be that simple.

“If that 20 mills from every little school district comes to the state treasury,” Kelly said, “I don’t know how that would not be considered at that point state money.”

Moreover, she said, this may be a “disingenuous” attempt to make it look like schools are receiving more dollars.

Kelly said she suspects most legislators weren’t aware the change was part of a bill related to mineral severance taxes and oil and gas depletion funds, which also included a provision to put mineral severance taxes toward schools.

Sen. Jim Denning, an Overland Park Republican and vice chair of the budget committee, said a key reason for the change is to comply with the school finance ruling issued by the Kansas Supreme Court this spring. Denning said it is important to provide a clear audit trail for the court.

“The ruling was very clear that going forward, they want everything counted,” he said, adding that means providing a full account of the state, local and federal dollars schools receive.

“Right now when we want those numbers,” he said, “the Department of Education manually calculates it. Now it will all be an audit trail, and you can see where it goes.”

On whether the state might withhold any of the funding, he said doing so would be “suicidal.”

“I just cannot imagine in my wildest dreams, of it ever being touched and used for something different,” he said.

Attorney John Robb, who represents the school districts in the ongoing finance lawsuit, called it “ridiculous” to suggest the change in property tax disbursal is needed to comply with the Supreme Court.

“Somebody is using creative thinking here,” he said.

He said the court didn’t indicate it has any concerns about the existing system for tracking the amount of property taxes that go to schools.

A press contact for the Kansas Supreme Court said she couldn’t comment on the content of the court’s ruling and its intent because the case is ongoing.

Meanwhile, the Kansas Bankers Association says local banks hope to see schools receive their funds from the state treasury promptly.

Doug Wareham, a lobbyist for the group, said the KBA is monitoring the change in law to see how fast the turnaround will be.

“Those dollars are a significant source of deposits for community banks across the state, keeping those dollars invested locally,” Wareham said, “and then those dollars are loaned back out in the community.”

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More anti-education shenanigans are being attempted. This time its Ty Masterson. Not a surprise.

“If that 20 mills from every little school district comes to the state treasury,” Senator Laura Kelly said, “I don’t know how that would not be considered at that point state money.” Moreover, she said, this may be a “disingenuous” attempt to make it look like schools are receiving more dollars.

Attorney John Robb, who represents the school districts in the ongoing finance lawsuit, called it “ridiculous” to suggest the change in property tax disbursal is needed to comply with the Supreme Court. “Somebody is using creative thinking here,” he said the court didn’t indicate it has any concerns about the existing system for tracking the amount of property taxes that go to schools.

This is a huge pile of money, and even with the present artificially-low interest rates, that means it will earn a lot of interest while in the State's account. Where will that interest go?

Will the earnings accrue to the education funds and be apportioned out to the school districts? Or will it be sucked away to the General Fund and kept by the State.
If it is the latter, then this amounts to a cash grab --- the State robbing the local districts.
That mean less money for schools and more local taxes.

more Smoke!! You watch all this tax money if distributed it will not be distributed as it should be. Brownie and the republican controlled legislature has got to go!! This is not representation this is a dictatorship at it's worst. Vote out anyone that has incumbent attached to their name.

Why is everyone so negative and running scared? The committee chair says he is "absolutely confident" districts will receive their payments, and the vice chair says he "cannot imagine in my widest dreams" any payments being touched. This being the case, why the panic, apprehension and uncertainty with the above readers/commentators? Where is your faith? Do you know something I don't?

Another smoke screen attempt to doctor the states books done in a back room and secretly stuck into a law no one read!

Whats next? The parents have to send the kids lunch money and past due library book money to the State so it "looks like" the money came from the state when its sent back if it gets sent back?

The local tax money could be more accurately counted by the trustworthy people at the local level and not by the crooked folks with malfunctioning calculators and questionable math skills in the Capital.

Have to disagree with ramjob.....fewer and fewer folks have confidence in this legislature. Koch brothers controlling Chamber of Commerce, Brownback and cronies pilfering from one fund to another,
tax cuts for the rich....no reason for this $ to go anywhere but to the school districts. Take from transportation fund for something else, trying to take from children's health fund for something else.

I knew they would find some way to cheat schools. Now I see they are not only cheating schools they are cheating all communities in Kansas. How? By not allowing local banks to hold the money and loaning the money to local people. Well Brownback and his followers just proved they cannot be trusted. Yes vote them out.

The sky is falling, the sky is falling! Good grief, the liberal conspiracy groupies are becoming the best comedy act on the CJ boards. Calm down and try hard to use your intelligence and try hard to understand how the system works before entering the Twilight Zone. The comments on here are becoming harder to take seriously. No matter what the situation is, no matter what is reported, no matter what is being discussed the same conspiracy and paranoid comments surface and gain a momentum all their own. And, always the same players feeding each other's delusionary fears and orchestrated fantastical scenarios.

Meanwhile, the same liberal conspiracy groupies seem oblivious to the decimation of our nation, based upon very REAL and very FACTUAL incidents being orchestrated by the Obama administration. Ironically, a very grave and ongoing set of circumstances being perpetrated by our President, very serious and grievous incidents that are based on truth and facts that cannot be altered.

The situation that has developed in Kansas due to Brownback's desire to experiment with Ks and working to move higher in the Republican party is grave and obvious to all. Very real and factual are the stats that Kansas is not bringing in the revenue as promised due to tax cuts for the wealthy. President Obama has nothing to do with what Brownback, the Koch brothers and the legislature has done to the budget and revenue. Education funds were cut and only restored due to legal action of the court and now with election coming up, the Governor is appearing with young children and promoting reading as much as he can. They tried to take $ from the children's health fund, until election year publicity caught up with them and now he will veto it. The facts are there for everyone to read. Many many who oppose the Governor are not liberals, we are from the same party.

So, if the state cuts funding, and local units of governments have to raise taxes to make up the difference, should they route that through the state so the state can say it's state aid, too? That way, they didn't cut funding at all!

Please, tell me, when did I say I support or do not support Brownback? Be cautious what your judgmental tendencies lead you to; maybe, just maybe, there are some people who judge each situation openly and not with any perceived judgmental bias. There are some Brownback policies I do not support and there are others that I do; there are some policies supported by Democrats I do not support and there are others that I do. I weigh each by it's own merits, not by the person or the political party that purports it. You might try it sometime, you know, caring to explore each issue individually for it's merits rather than vilify issues based on bias.

Furthermore, my comment regarding Obama was to make the point that those who are Democrats pounce on every opportunity to land blast Republicans; those opposed to Brownback act in similar fashion. I think I made that clear in my commentary. Again, reading and analyzing something for it's merits is always wiser than using bias.

The 20 mills mandated for collection by the Legislature is included in the calculation of Base State Aid but is not included in what is reported as state aid because it wasn't run through the state treasury. The change would have no effect on how aid due schools is calculated.

It was stuck in a completely unrelated, and easily passable, bill, with no debate, no public input. Masterson talks of transparency, but doesn't practice it himself. Now that this has been exposed, it will be scrutinized, and the money BETTER go to the schools, in a timely manner, or the lawsuits will come flying.